Need Advice. Tricky Business Situation...

[oldgym]

go 50/50 and tell him his contribution needs to be standing at a busy intersection with a sign advertising the website for 8hrs a day. I quarantee that after the first week he will
negotiate a 80/20 if he only need to stand for 2hrs a day..

..and then he will renegotiate 90/10 to not stand at all.

after realizing how hard it is to get the idea kicked off and successful he will respect you for your efforts to grow the idea and appreciate the 10% he owns.

 

[daniwilson]

you should give him something for his idea, either have him as a partner (small percentage), or just buy his idea up front. Since you're paying for all the fees, and etc.

 

[vortex]

ask him if he prefers a payout like dono $$$$ for one time or if he would like to be your partner. If he decides for partnership, ask him what he can do himself to create this project. As you mention it will not be a lot give him 30% of it. If its to less give him a single payment and an additional % of the profits the company makes for a certain amount of time.

In either way get a lawyer to prepare the suitable contract.

Too early for english here... sorry for my bad writing ;p

 

[-joe-]

Have you let on yet how profitable you think it'll be?

If not, play it down, act like it's gonna be a bit of a drain on your time etc, but say you're willing to do it. Come up with a percentage deal, where he ends up with ~20-30%, then act surprised if it blows up.

 

[scottspfd82]

Wasnt aimed directly at you Scott

Ahh, misunderstood, thought it was aimed at me, I apologize.

Have you let on yet how profitable you think it'll be?.

Yeah. The second he told me I was like "holy shit dude", and started explaining the investment/work that would be involved to make it happen.

I talked to him. We've settled on a 70/30 deal, 70% for me.

He's agreed to just stay out of my way and do things I tell him to do, handle our social networking promotions (which he'd be good at), and more as he learns.

As far as getting it developed and live, I'm going to take care of it myself.

Really appreciate the feedback though.

-Scott

 

[jwm]

50/50 but your time gets charged to the company at a full agreed hourly rate.

Any profits made need to be used to pay the balance that accrues under this first before he can take a dime out or alternatively this balance can be converted into stock at an agreed rate down the road

EDIT - just seen you have done a deal so ignore this!

 

[WhatupG]

Counting chickens before they are hatched.

It's a waste of time and energy at this point to even worry about it. Right now you either

1. Work the idea

2. Discard the idea.

If you decide to work on it, and it's successful then do the right thing.

The only thing that may matter right now is if he tells me or someone else the idea and they beat your ass too it. The rest is 100% irrelevant in regards to your two options.

Even 100% of nothing is still nothing.

 

[deStone]

As someone who has a closet full of life lessons in partnerships -- Partnerships are for the birds, they smell like rotten vagina, and they will ruin your friendship in the long run anyways...

My four suggestions / options:

* Buy the dude's idea outright for $x dollars...

* Offer him a percentage for the idea but maintain complete control of the operation and decision making - dude is just collecting a check and that's IT. Like a royality... sorta...

* Pass on the idea completely, wish him best of luck...

* Screw your friend over - (we are talking about a million/billion dollar idea that he is obviously not capable of doing himself but you are...) Some friends aren't worth $50 bucks... There are 6.9 Billion people in this world (352 Million in North America) who would be your friend if you have a few million dollars.


DO NOT get in a situation where this person has any say on the way the company would run. If you do, you will hate your life. I am serious. YOU. WILL. HATE. YOUR. LIFE.

 

[deStone]

As someone who has a closet full of life lessons in partnerships -- Partnerships are for the birds, they smell like rotten vagina, and they will ruin your friendship in the long run anyways...

My four suggestions / options:

* Buy the dude's idea outright for $x dollars...

* Offer him a percentage for the idea but maintain complete control of the operation and decision making - dude is just collecting a check and that's IT. Like a royality... sorta...

* Pass on the idea completely, wish him best of luck...

* Screw your friend over - (we are talking about a million/billion dollar idea that he is obviously not capable of doing himself but you are...) Some friends aren't worth $50 bucks... There are 6.9 Billion people in this world (352 Million in North America) who would be your friend if you have a few million dollars.


DO NOT get in a situation where this person has any say on the way the company would run. If you do, you will hate your life. I am serious. YOU. WILL. HATE. YOUR. LIFE.

I finally read everyone elses replys and my post is nothing more than a summary of what they were saying... Glad other people are on the same wavelength as me though -- I was able to add the terms "rotten vagina" to the discussion though... haha..